CAD/CHF looks set to extend a months-long downtrend!
With CHF scoring 6.8/10 versus CAD’s 6.5/10 in this week’s FX Fundies Cheat Sheet, and technical patterns showing a potential resistance rejection, CAD/CHF appears positioned for further downside as markets navigate the uncertain landscape of trade negotiations and shifting risk sentiment.
Here’s what we’re seeing on the 4-hour time frame:
CAD/CHF 4-hour Forex Chart by TradingView
The Swiss franc remains firm as a go-to safe haven amid ongoing global trade and economic uncertainty. It also continues to attract investors looking for alternatives to the US dollar, especially as markets reassess US deficit concerns and shift their expectations around Fed rate cuts.
Meanwhile, the Canadian dollar has shown more strength than expected, raising questions about potential overvaluation. This resilience may not hold if key drivers turn against CAD.
One major catalyst to watch this week is the ongoing speculation around a potential US-Iran nuclear deal. Any meaningful progress could weigh heavily on oil prices by removing the geopolitical risk premium, which would in turn pressure the oil-sensitive Canadian dollar.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Canadian dollar and the Swiss franc, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
On the charts, CAD/CHF is still locked in a clear downtrend on the 4-hour timeframe. The pair has consistently been rejected at a trend line resistance that’s been around since February.
The latest bounce stalled near the .6050 psychological level, which aligns with the 61.8% Fibonacci retracement and trend line resistance. It looks like sellers are actively defending this zone, and CAD has yet to gain traction against the Swiss franc.
If price breaks below the .5950 area with conviction, the pair could revisit its .5800 lows or even chart new 2025 lows beneath that level.
However, if the bullish SMA crossover on the chart draws enough upside momentum to keep CAD/CHF supported above the .6000 handle, a retest of trend line resistance may be in play.
Sustained trading above the trend line and the R1 Pivot Point could open the door for a move toward the .6150 zone, which previously acted as a key inflection point.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.